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Cooper Tire & Rubber (CTB): Q4 EPS of $0.51 beats by $0.12. Revenue of $1.05B (+14% Y/Y)...

Cooper Tire & Rubber (CTB): Q4 EPS of $0.51 beats by $0.12. Revenue of $1.05B (+14% Y/Y) beats by $30M. (PR)
Comments (1)
  • rubberoptions
    , contributor
    Comments (400) | Send Message
     
    CTB jumping by $2 upon earnings announcement is overly optimistic. CTB Investors' expectations are about to get deflated (bad pun, ah know !!) due to a surge of some 20% within 7 weeks of natural rubber prices from $3100 in early Jan 2012 up to $3800 by end Feb 2012.

     

    actually if natural rubber prices at a South east Asian rubber exchange was not dubious amidst thin trading, fair value for the Indonesian origin rubber most commonly used by CTB as feedstock would be in the US$4,000 per metric ton

     

    That would actually set back CTB some more in terms of earnings

     

    That $2 jump? not so fast... CTB investors are better off over-writing calls on CTB

     

    when the Rubber Meets the Road, CTB management can't bring themselves to hedge using futures & options

     

    Perhaps CTB management need to consult UAL, LUV, JBLU.. who are still able to turn a profit in spite of cut throat competition.
    28 Feb 2012, 01:05 AM Reply Like
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